WASHINGTON (CNN) -- The United States secretly shipped out of Iraq more than 500 tons of low-grade uranium dating back to the Saddam Hussein era, the Pentagon said Monday.

In this 2003 photo, UN inspectors work at the nuclear facility in Iraq.

The U.S. military spent $70 million ensuring the safe transportation of 550 metric tons of the uranium from Iraq to Canada, said Pentagon spokesman Brian Whitman.

The shipment, which until recently was kept secret, involved a U.S. truck convoy, 37 cargo flights out of Baghdad to a transitional location, and then a transoceanic voyage on board a U.S.-government-owned ship designed to carry troops to a war zone, he said.

The "yellowcake" uranium transfer was requested by the Iraqi government at the encouragement of the U.S. government, Whitman said.

The United States approached Canadian company Cameco to bid for the material, according Cameco spokesman Lyle Krahn. He would not disclose the winning bid amount.

Krahn admitted that this was not a "routine transaction," but he said the agreement was approved by the Canadian government and was carefully monitored.

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The undertaking, named "Operation McCall" by Pentagon officials, was in the planning stages for months and was completed Saturday after the material had been in transit for weeks, according to Whitman.

He said yellowcake uranium is a commonly traded commodity used for nuclear power generation. It is not enriched and cannot be used without first going through a complicated enrichment process, he said, but because of the unstable nature of Iraq, the United States and the Iraqi government decided it should be moved out of that country. Iraq has no nuclear power generating plants.

The uranium was packed into 110 shipping containers moved by convoy from a facility in Tuwaitha, Iraq, about 12 miles south of Baghdad. The containers were first moved to the secure International Zone in central Baghdad and then to Baghdad International Airport, where thery were loaded onto C-17 cargo planes.

It took 37 flights to move the shipping containers out of Iraq to a "third country," Whitman said.

A Pentagon official who asked not to be named said that third country was Diego Garcia, a British territory in the Indian Ocean where the United Kingdom and the United States operate a joint military base.

From that third country, Whitman said, the containers were loaded onto the SS Gopher State, a U.S.-owned crane ship normally used to haul equipment in and out of war zones. The ship carried the uranium to Canada, where it was bought by Cameco, a private firm.

The uranium will be sent by truck to two processing plants in Ontario, Krahn said. Once it has been enriched for energy use it will be sold to power plant operators, he said.

The United States is Cameco's largest customer, Krahn said, but he did not specify if the Iraq yellowcake would ultimately end up in the United States.

Whitman said the Department of Defense's cost of securing and transporting the uranium from Tuwaitha to Canada was $70 million, and the government of Iraq had agreed in principal to reimburse the United States for part of that cost.

He said he could not say how much Iraq intends to repay the United States.